Acquisitions

9 Months Ended

Sep. 30, 2011

Acquisitions

Acquisitions

4. Acquisitions

Bioniche Pharma

On September 7, 2010, the Company completed the acquisition of 100% of the outstanding equity in Bioniche Pharma Holdings Limited ("Bioniche Pharma"), a privately held, global injectable pharmaceutical company. The Company financed the transaction using a combination of cash on hand and long-term borrowings. In accordance with GAAP guidance regarding business combinations, the Company used the purchase method of accounting to account for this transaction. Under the purchase method of accounting, the assets acquired and liabilities assumed in the transaction were recorded at the date of acquisition at their respective fair values.

Bioniche Pharma manufactures and sells a diverse portfolio of injectable products across several therapeutic areas for the hospital setting, including analgesics/anesthetics, orthopedics, oncology, and urology, with most of the company's sales made to customers in the U.S.

The purchase price of $543.7 million has been allocated to the assets acquired and liabilities assumed for the Bioniche Pharma business as of the acquisition date as follows:

(In thousands)
Current assets (excluding inventories)	$	41,680
Inventories		28,500
Property, plant and equipment, net		16,211
Identified intangible assets		186,000
In-process research and development ("IPR&D")		143,000
Goodwill		207,390
Total assets acquired		622,781
Current liabilities		(37,389	)
Deferred tax liabilities		(36,910	)
Other non-current liabilities		(4,746	)
Net assets acquired	$	543,736

The amount allocated to acquired IPR&D represents an estimate of the fair value of purchased in-process technology for research projects that, as of the closing date of the acquisition, had not reached technological feasibility and had no alternative future use. The fair value of the IPR&D was based on the excess earnings method, which utilizes forecasts of expected cash inflows (including estimates for ongoing costs) and other contributory charges, on a project-by-project basis, and will be tested for impairment in accordance with GAAP guidance. A discount rate of 11.0% was utilized to discount net cash inflows to present values.

Three research projects represent approximately 60% of the total fair value of IPR&D, and, combined, these projects had an expected cost to complete of less than $10 million as of the acquisition date. All projects are in various stages of completion, but are expected to begin producing a benefit to the Company by 2013. There are risks and uncertainties associated with the timely and successful completion of the projects included in IPR&D, and no assurances can be given that the underlying assumptions used to prepare the discounted cash flow analysis will not change or the timely completion of each project to commercial success will occur. Refer to Note 8 Goodwill and Intangible Assets for information regarding the Company's annual impairment review of these IPR&D assets.

The identified intangible assets of $186.0 million are comprised of product rights and licenses that have a weighted average useful life of approximately eight years. The goodwill of $207.4 million arising from the acquisition consists largely of the value of the employee workforce and the value of products to be developed in the future. All of the goodwill was assigned to Mylan's Generics Segment. None of the goodwill recognized is expected to be deductible for income tax purposes.

Pro Forma financial results

The operating results of Bioniche Pharma have been included in Mylan's Condensed Consolidated Statement of Operations since September 7, 2010. The following table presents supplemental unaudited pro forma information as if the acquisition of Bioniche Pharma had occurred on January 1, 2009. This summary of the unaudited pro forma results of operations is not necessarily indicative of what Mylan's results of operations would have been had Bioniche Pharma been acquired on January 1, 2009 and may not be indicative of future performance.

The unaudited pro forma financial information for the period below includes the following charges directly attributable to the accounting for the acquisition: amortization of intangibles of $6.8 million and $20.3 million for the three and nine months ended September 30, 2010. In addition, the unaudited pro forma financial information for the period presented includes the effects of certain additional borrowings used to purchase Bioniche Pharma as if they occurred on January 1, 2009.

(Unaudited; in thousands, except per share amounts)	Three Months  Ended September 30, 2010		Nine Months  Ended September 30, 2010
Total revenues	$	1,386,730	$	4,127,302
Net earnings attributable to Mylan Inc. before preferred dividends		135,602		307,306
Preferred dividends		34,759		104,276
Net earnings attributable to Mylan Inc. common shareholders	$	100,843	$	203,030
Earnings per common share attributable to Mylan Inc. common shareholders
Basic	$	0.33	$	0.66
Diluted	$	0.31	$	0.65
Weighted average common shares outstanding:
Basic		309,446		308,470
Diluted		437,921		313,014